City OKs reduced low-cost housing plan

MISSION VIEJO – The Planning and Transportation Commission on Monday unanimously approved a developer's request to reduce the number of affordable housing units in an apartment complex it is planning to build along Oso Parkway.

In July 2011, the commission approved Watermarke Properties' 256-unit complex south of Oso Parkway and Montanoso Drive. The agreement provided for 38 affordable units, 21 for very-low income residents and 17 for low-income residents, according to a staff report. The units would have helped the city meet state affordable-housing requirements.

As part of the agreement, Watermarke had applied to the city's redevelopment agency for a $4.8 million subsidy to fund the affordable units, according to the report. In February 2012, however, the state dissolved all redevelopment agencies, eliminating the property tax revenue they receive as a source of funding for such subsidies.

In December 2012, the state required the city to give back the money. City officials asked Watermarke to join them in suing the state to retain the funds, but the developer declined. The City Council subsequently voted to pay back the money.

As a result, Watermarke in late February asked the city to reduce the number of affordable units in the project to 22 from 38. The developer also requested the city reduce the number of years to 30 from 55 that the apartments are to be made affordable.

Jeff Oderman, Watermarke's lawyer, told the commission Monday that plans have been approved for the project and construction is ready to begin.

Planning Manager Elaine Lister recommended approval of Watermarke's request, saying the reduction will not impact the city's 2014-2021 housing element, which has the city providing for 71 affordable units.

This isn't the first time a developer has asked to reduce the number of affordable units.

In May, UDR, which is building a 320-unit apartment complex on Los Alisos Boulevard in the former Kmart location, received City Council approval to drop the number of affordable units to 24 from 48 because of the loss of redevelopment funds.